A rally in equities lost some of its steam in Asia-Pacific trading, as investors weighed up hopes the US coronavirus outbreak could be nearing its peak amid the catastrophic impact on global business and economic activity.
Japan’s Topix stock index dropped 1.6 per cent on Thursday, putting a three-day run of consecutive gains under threat, while China’s CSI 300 of Shanghai- and Shenzhen-listed shares edged 0.3 per cent higher.
Elsewhere, Sydney’s S&P/ASX 200 index added 2.4 per cent while South Korea’s Kopsi rose 1.2 per cent.
Analysts said the Asian trading reflected the challenge of interpreting the latest data around the pandemic.
Investors this week have cautiously embraced the possibility that the so-called coronavirus curve is flattening and the virus is spreading more slowly.
“I think everybody’s focusing on the Covid curves — that seems to be the new risk barometer,” said Stephen Innes, chief global market strategist at AxiCorp, referring to the rate at which the virus spreads.
On Wall Street, stocks closed higher on Wednesday after the rate of increase of new US cases slowed for a fifth consecutive day. The S&P 500 ended the day 3.4 per cent higher, taking its gains for the week to almost 11 per cent.
Support for equity prices fed through into credit markets. The largest high-yield bond exchange traded fund — known by its ticker HYG — rose 2.6 per cent overnight, climbing for third straight day. The US 10-year treasury yield was 3 basis points lower at 0.74 per cent in Asian trading on Thursday.
S&P 500 futures tipped the Wall Street benchmark to rise 0.3 per cent when US trading begins later in the day, while FTSE 100 futures signalled a 0.9 per cent rise.
There have been some signs of optimism in Europe this week following signs of a slowdown in new coronavirus cases on the continent and news that Austria, Denmark and the Czech Republic would ease restrictions over the coming weeks. But continued uncertainty meant trading has been tempered by caution.
“Markets don’t have enough concrete data that’s probably reliable enough to make heads or tails or it, so [they are] getting driven by sentiment,” said Mr Innes.
Elsewhere, oil prices rose ahead of a meeting between Saudi Arabia and Russia on Thursday, which has raised hopes of a deal to curb production and underpin sliding prices.
G20 oil ministers are set to meet on Friday as part of efforts to find measures to support an industry where demand has fallen sharply on the back of the coronavirus outbreak.
Brent crude, the international benchmark, added 0.2 per cent to $32.9 per barrel, giving up most of its gains from earlier on Thursday morning.
The post Stock rally loses momentum in Asia as traders eye virus spread appeared first on Financial Times.